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Raymond J. Donovan, Secretary of Labor, United States Department of Labor v. Simmons Petroleum Corporation, 725 F.2d 83, 10th Cir. (1983)
Raymond J. Donovan, Secretary of Labor, United States Department of Labor v. Simmons Petroleum Corporation, 725 F.2d 83, 10th Cir. (1983)
2d 83
26 Wage & Hour Cas. (BN 936, 99 Lab.Cas. P 34,492
Robert W. Harris of Harris & Hills and James W. Dahl of Kansas City,
Kan., for defendant-appellant.
T. Timothy Ryan, Jr., Sol. of Labor, Beate Bloch, Associate Sol., Ruth E.
Peters, Counsel, Washington, D.C., for Appellate Litigation; Ellen C.
Segal, Atty., Dept. of Labor, Washington, D.C., and Tedrick A. Housh,
Regional Sol., Kansas City, Mo., for plaintiff-appellee.
Before McKAY, LOGAN and SEYMOUR, Circuit Judges.
McKAY, Circuit Judge.
After examining the briefs and the appellate record, this three-judge panel has
determined unanimously that oral argument would not be of material assistance
in the determination of this appeal. See Fed.R.App.P. 34(a); 10th Cir.R. 10(e).
The cause is therefore ordered submitted without oral argument.
1975, until November 1979, the Employer deducted cash register shortages and
the amount of uncollectible checks accepted by its employees from the
paychecks of employees who were on duty when the shortages occurred. These
deductions resulted in the employees being compensated below the minimum
wage set by section 206 of the Act. Further, the Employer did not pay
employees one and one-half times their regular pay rates for work in excess of
forty hours per week. The Employer did not compensate employees for time
worked before or after scheduled shift hours to operate the stations and
complete bookwork. Although the Employer kept payroll records, the records
reflected neither the cash register shortage deductions nor the uncompensated
hours.
3
The trial court found that these actions violated the minimum wage, overtime
and recordkeeping provisions of the Act, and ordered the Employer to
compensate former employees for shortages. The amount of compensation was
based on the court's revision of formulae developed by the plaintiff's
compliance officer who investigated the violations.
On appeal, the Employer challenges the trial court's (1) finding of willfulness
and the corresponding extension of the statute of limitations from two to three
years and (2) use of the formulae.
Title 29 U.S.C. Sec. 255(a) provides for extending the statute of limitations for
prosecution of minimum wage and uncompensated overtime violations from
two to three years if the violations were willful.1 Accordingly, upon finding
that the Employer's violations were willful, the trial court extended the statute
of limitations. In 1976, the Employer was investigated for deducting cash
register shortages from employee paychecks and paid $800 in settlement. The
Employer argues that its actions prior to the 1976 investigation could not have
been willful because it was not informed of violations until that investigation
took place. Further, the Employer claims, the 1976 investigation was concerned
only with minimum wage violations, not with uncompensated time violations
and therefore even after 1976, its actions could not have been willful with
respect to the uncompensated time charge because that infraction was
unknown.
enough that an employer knew that the Act was "in the picture." Mistretta v.
Sandia Corp., 639 F.2d 588, 595 (10th Cir.1980) (citing Coleman v. Jiffy June
Farms, 458 F.2d 1139, 1142 (5th Cir.1972)). Applying this standard in light of
the size and complexity of the Employer's operation, as well as the Employer's
bookkeeping practices, the trial court did not err in finding that the Employer
was at least generally aware of the law's requirements and therefore the
violations were willful.
7
The Employer challenges the use of the formulae on the grounds that the
testimony offered by the plaintiff was not representative of all the stations
involved and was not definite enough to accurately determine the cash register
shortages and uncompensated time.
The employee bears the burden of proving he performed work for which he
was not properly compensated. Anderson v. Mt. Clemens Pottery Co., 328 U.S.
680, 687, 66 S.Ct. 1187, 1192, 90 L.Ed. 1515 (1946). However, employers
have a duty to keep accurate records. If employers do not keep accurate records
the employee's burden is extremely difficult. In order to prevent the employee
from being penalized by the employer's failure to keep adequate records, the
Supreme Court held in Anderson that an employee carries his burden by
proving that he has "in fact performed work for which he was improperly
compensated and ... [producing] sufficient evidence to show the amount and
extent of that work as a matter of just and reasonable inference." Id. Upon such
a showing, the burden shifts to the employer to produce evidence of the precise
amount of work performed or to negate the reasonableness of the inference
drawn from the employee's evidence. If the employer does not rebut the
employee's evidence, then damages may be awarded even though the result is
only approximate. The employer cannot complain that the damages lack the
precision that would have been possible if the employer had kept the records
required by law. Id. at 687-88, 66 S.Ct. at 1192.
10
The Employer did not produce evidence to rebut the inference. Thus, the court
was justified in formulating a reasonable approximation of damages.4 Anderson
v. Mt. Clemens Pottery Co., 328 U.S. at 687-88, 66 S.Ct. at 1192; Hodgson v.
Humphries, 454 F.2d 1279, 1283 (10th Cir.1972); cf. Love v. Pullman Co., 569
F.2d 1074, 1077 (10th Cir.1978) (formula used to determine back wages in
Title VII action). The court evaluated and reworked the compliance officer's
formulae in light of the evidence. Unable to rebut the plaintiff's evidence, the
Employer is not in a position to complain that the award is imprecise. Anderson
v. Mt. Clemens Pottery Co., 328 U.S. at 688, 66 S.Ct. at 1192. See also,
Donovan v. Williams Oil Co., 717 F.2d at 505-06 (10th Cir.1983).5
11
Finally, the Employer contends that the trial court incorrectly computed
damages owed for the uncompensated overtime violations. According to the
Employer, in assessing damages for uncompensated overtime for managers, the
court should have considered only the amount that brought the Employer under
the statutory minimum wage. In other words, the Employer is claiming that it is
entitled to a credit against unpaid overtime for hourly wages paid in excess of
the minimum wage. The statutory scheme does not provide for such a credit.
Section 207(a)(1) requires that time worked in excess of forty hours per week
be compensated at one and one-half times the employee's regular rate of pay.
12
AFFIRMED.
Any action commenced on or after May 14, 1947, to enforce any cause of
action for unpaid minimum wages, unpaid overtime compensation, or
liquidated damages, under the Fair Labor Standards Act of 1938, as amended,
(a) if the cause of action accrues on or after May 14, 1947--may be commenced
within two years after the cause of action accrued, and every such action shall
be forever barred unless commenced within two years after the cause of action
accrued, except that a cause of action arising out of a willful violation may be
commenced within three years after the cause of action accrued.
29 U.S.C. Sec. 255 (1976).
222, 333
3
The Employer asserts that the rule that the use of representative testimony can
establish a pattern of violations is limited to situations where the employees
leave a central location together at the beginning of a work day, work together
during the day, and report back to the central location at the end of the day.
This rule is not supported by caselaw. For example, in Donovan v. Burger King
Corp., 672 F.2d 221 (1st Cir.1982), employees from six locations established a
pattern of violation for 44 locations in two states
The Employer argues that a formula damage computation may be used only
where corroborated by testimony from each of the injured employees. This
argument is not supported by caselaw and would undermine the rule in favor of
representative testimony
The Employer contends that it should not have to pay damages for violations
during the period covered by the 1976 investigation, since it paid $800 in
settlement for that investigation. The compliance officer testified that she
excluded from her formulae violations which had already been compensated.
Record, vol. 10, at 561-62
The Employer also contends that it should not have to pay damages for the
period from March 5, 1979, to November 30, 1979, since no specific evidence
was produced with respect to that period. However, once the plaintiff
established a pattern of violation, the just and reasonable inference arose that
those violations continued. The Employer did not rebut this inference.